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La Paz, August 21, 2024
Mister
Pedro Rivero Jordan
DIRECTOR OF THE NEWSPAPER “EL DEBER”
Equipetrol Business Center, 1st. Floor
Cell phone 77306041
Santa Cruz de la Sierra
REF.: Press Release Published on August 21, 2024
Dear Director:
I am referring to your publication entitled “Bs1.2 billion in losses detected in the stock market”, which was published in your media outlet on August 21, 2024.
In this regard, it is pertinent to clarify some aspects pointed out in the aforementioned press release that do not reflect the objective reality of the national stock market:
• It is important to note that the Bs1.2 billion referred to in the publication correspond to the total amount negotiated in repurchase agreements by Sudaval Agencia de Bolsa SA and iBolsa Agencia de Bolsa SA, and not to a loss as indicated by the title of the publication.
In this regard, it is necessary to clarify that: “A repurchase transaction is defined as a stock market transaction by which the Reporter buys securities, at a certain Price, from the Reported Party, with the commitment and obligation to resell said securities within an agreed period, against reimbursement of the original Price plus a Premium…”. Both stock brokerages (Reported Parties) failed to comply with their obligation to repurchase the securities that are the subject of the repurchase transactions.
However, according to current regulations, as an alternative solution to this non-compliance, the Reporters chose to “consolidate themselves as definitive owners of the securities subject to the Repurchase/Repurchase Agreement transactions, a situation that allows them to demonstrate that there was no loss for the total amount negotiated in repurchase agreements.
• By means of ASFI Resolutions 011/2024 and ASFI 033/2024 of January 3 and 10, 2024, respectively, this Supervisory Authority determined the cancellation in the ASFI Securities Market Registry of Sudaval Agencia de Bolsa SA and iBolsa Agencia de Bolsa SA considering that, among other infractions, they failed to comply with repurchase agreements.
Both brokerage firms filed Appeals for Revocation against the Resolutions issued by ASFI, in which they pointed out new arguments, which were considered to modify the modulation of the sanction imposed and which are detailed below:
Evidence showing that they demanded payment for the transactions from their clients.
Renewals of repurchase agreements that were consensual and not unilateral.
Consolidations of values that were carried out without opposition from their counterparts.
In accordance with the assessment of the allegations raised and the documentation submitted by both stock brokerage firms, this Supervisory Authority, within the framework of its powers, issued Resolutions ASFI/187/2024 and ASFI/260/2024 partially confirming Resolutions ASFI/011/2024 and ASFI/033/2024, respectively, leaving the determined breaches firm and subsistent, modifying the sanction of definitive cancellation for temporary suspension of 90 calendar days for Sudaval Agencia de Bolsa SA and 180 calendar days for iBolsa Agencia de Bolsa SA
It should be noted that, to date, Sudaval Agencia de Bolsa SA has complied with its temporary suspension sanction and its authorization in the ASFI Securities Market Registry is in force.
In the case of iBolsa Agencia de Bolsa SA, it has been subject to another sanctioning process for non-compliance with the Securities Market Law that resulted in the sanction of definitive cancellation of the ASFI Securities Market Registry, in accordance with Resolution ASFI/812/2024.
Regarding the fact that the resources managed by the Public Pension Manager would have been affected by the non-compliance of the repurchase operations by Sudaval Agencia de Bolsa SA and iBolsa Agencia de Bolsa SA, and considering that this statement comes from unidentified sources, it is not proven, considering that according to the information in the account, this regulator has no records of a direct affectation to the resources managed by the Manager, since it has not been constituted as a Reporting client in any of the repurchase operations breached by the aforementioned stock brokerages.
Regarding the participation of non-financial entities in repurchase agreements, it is worth mentioning that the Regulations for Repurchase Agreements contained in the Compilation of Rules for the Securities Market in force since December 31, 2013, were modified by Resolution ASFI/414/2023 of March 31, 2023, establishing, among others, the obligation for Stock Exchange Agencies to evaluate the debt capacity, financial, equity and liquidity situation of clients not regulated by ASFI or APS, in order to carry out repurchase agreements, a fact that allows the regulator to reduce the risks inherent to repurchase agreements carried out through the Bolivian Stock Exchange.
Finally, we would like to inform you that the stock market is carrying out its operations normally. We would also like to point out that this Supervisory Authority, within the framework of its powers, is instituting sanctioning processes against all stock brokerage firms that have failed to comply with repurchase agreements.
Without further ado, I greet you cordially.
